Ireland’s Non-Dom regime (officially the Remittance Basis of Taxation) allows foreign nationals living in Ireland to avoid Irish tax on foreign income that is not brought into the country. It is one of the few remaining non-dom regimes in Europe.
Residence vs. Domicile
In Irish law, residence and domicile are different:
- Residence: Where you live. If you spend more than 183 days a year in Ireland, you are a tax resident.
- Domicile: Your permanent home — usually the country where you were born or where your father was born.
If you move to Ireland but your domicile is elsewhere (for example, the US, Italy, or South Africa), you are a Non-Domiciled Resident. This status allows you to use the remittance basis.
The Remittance Basis
Under the remittance basis, Ireland only taxes foreign income that you bring into the country. Foreign income that stays in offshore accounts is not subject to Irish tax.
Example
If you have a rental property in New York generating €200,000 a year:
- If the money stays offshore: Ireland taxes €0 of it.
- If you bring €50,000 into Ireland: You pay Irish tax only on that €50,000.
Clean Capital
Money you had before becoming an Irish tax resident is considered “clean capital.” You can bring clean capital into Ireland without paying tax on it. The key is to keep pre-residency funds in separate accounts from post-residency income. Mixing them can cause the entire amount to be treated as taxable income.
Why Ireland
- English-speaking: Post-Brexit, Ireland is the main EU country where you can live and work entirely in English.
- Connectivity: Dublin has direct flights to major European cities and the US East Coast.
- Tech sector: Many global tech companies have European headquarters in Ireland.
Substance Requirements
You need to actually live in Ireland to claim Non-Dom status. This means having a home there, a local bank account, and spending the required time in the country. Paper residency arrangements do not work.
Capital Gains and Inheritance
- Capital Gains: If you sell a foreign asset and keep the proceeds outside Ireland, you generally avoid Irish Capital Gains Tax.
- Inheritance: Ireland has rules that can be favorable for Non-Doms passing wealth to the next generation.
Summary
The Irish Non-Dom regime is useful for people with significant foreign income who want to live in Europe. The remittance basis means you only pay Irish tax on income you actually bring into the country. Clean capital brought in from before residency is not taxed. The key requirements are genuine residence and careful account management.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws change frequently, and individual circumstances vary. Always consult a qualified tax advisor before making financial decisions.